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THE LEAD WITH JAKE TAPPER

Debt Deal?; Conservatives Meeting in D.C.; Interview With Senator Johnny Isakson and Senator Sherrod Brown

Aired October 11, 2013 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JAKE TAPPER, CNN ANCHOR: The White House press briefing is now three hours late and counting. We're awaiting Jay Carney at any moment. Whatever could they be talking about behind the scenes?

I'm Jake Tapper. This is THE LEAD.

The national lead. The Republicans floated an offer. Will the White House accept it, and, if so, how much longer until we get our government back? We're waiting on a very tardy briefing from the White House.

The politics lead. It's like Bonnaroo for people you would never see at Bonnaroo, three days of conservative speeches and strategy in D.C. And the organizer says the real leader of the Republican Party is not the one cutting the deals right now.

And the money lead, a fish out of water moment on Capitol Hill today. One of the captains from the hit show "Deadliest Catch" putting Congress on the hook for threatening his livelihood with the shutdown.

We begin with the national lead. Welcome to THE LEAD. I'm Jake Tapper.

First, it was at 1:00 p.m., then it was 1:30, then it was moved to 2:45, and now it's just after 4:00 p.m. Eastern and the White House briefing is only now about to begin. We will bring it to you live when Jay Carney comes out there on the dais. The suspense is killing us because the White House is considering a plan from House Republicans that could provide a way out of the mess in which we find ourselves.

Within the last few minutes, we have learned that President Obama and Speaker John Boehner spoke on the telephone, according to Boehner's spokesman, and they agreed, wait for it, to keep talking.

The House GOP plan would raise the debt ceiling for six weeks in exchange for further budget talks and, with any hope, clear the air for discussion on reopening the government. It's been 11 days now since the government partially shut down, sending more than 400,000 federal workers on furlough at last count and disrupting services, and no pressure here, but we will also be hitting the debt ceiling on Thursday, after which the government will not have all the money to pay all its bills.

The House is not expected to vote today on the GOP plan to raise the debt limit in the short-term. Now we're hearing this weekend, perhaps. Earlier in the day, President Obama met with Senate Republicans at the White House, just as he met with House Republicans last night.

And I want to bring in one of the players who was in that meeting this morning, Senator Johnny Isakson, Republican from Georgia. He's a member of the Senate Finance Committee.

I want to apologize ahead of time because, when Carney comes out, just in case he has something important to say, I'm going to rudely cut you off, and then we will come back to you after he's done.

SEN. JOHNNY ISAKSON (R), GEORGIA: I have been bumped by Jay before.

TAPPER: Is that right? OK. But -- oh, he's at the -- he's at the -- there he is. Jay Carney is about to start. And we will get reaction from Johnny Isakson afterwards.

(JOINED IN PROGRESS)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: ... for being here. Thank you for your patience.

It's obviously been a long afternoon. And I just wanted to make sure that, before I came out to you, I could provide you with as much updated information as possible.

I don't have an opening statement to make, and in the interest of moving this along, I will go straight to questions.

(LAUGHTER)

CARNEY: Well, I can anticipate some of your questions. So it was the kind of information that I hope will be responsive to your questions at least in part that I sought and found.

Julie?

QUESTION: Can you tell us what the president and Speaker Boehner discussed in their phone call?

CARNEY: Yes, I can.

The president did call and speak with speaker of the House this afternoon, not long ago, had a good conversation, and the two of them agreed that all sides need to keep talking on the issues here that are confronting us that have led to a shutdown of the government and to the situation that has put us on the precipice of, you know, potential default or at least reaching that line beyond which the United States government does not have borrowing authority.

So the president believes that in his meetings yesterday with House Republican leaders and today with Senate Republicans, as well as, of course, with House and Senate Democrats, that we have had -- there have been constructive talks. And when it comes to the House Republicans in particular, there is an indication anyway of a recognition that we need to remove default as a weapon in budget negotiations, that the threat of default should not be used, and certainly default itself is never an option.

And the president appreciates the constructive nature of the conversation and of the proposal that House Republicans put forward. He has some concerns with it. And I will simply say that without reading any -- I'm not going to read out details of conversations with the phone calls, but that our position, the president's position that we, the United States, should not and the American people cannot pay a ransom in exchange for Congress doing its job remains as true today as it has been throughout this period.

QUESTION: When you talk about a House Republican proposal, are you talking about the proposal that they presented in a meeting yesterday, or are you talking about this new proposal from them that would increase the debt ceiling short-term, also reopen the government and then, in exchange, include these cuts in benefit programs?

CARNEY: Well, again, I don't think -- I'm not aware of multiple proposals.

I think that there has been a general discussion -- and I'm not going to get into details. I will simply say that the president has long believed and has insisted that we cannot allow a situation where one party in one house uses the threat of default to try to extract concessions through budget negotiations.

And it is his position that the right thing to do is to remove that gun from the table, extend the debt ceiling in a way that ensures that there is no suggestion or hint that default is an option, because our economy can't endure that kind of approach to resolving our budget differences.

And, you know, a proposal that puts a debt ceiling increase at only six weeks tied to budget negotiations would put us right back where we are today in just six weeks, on the verge of Thanksgiving and the obviously important shopping season leading up to the holidays.

And that would create enormous uncertainty for our economy. The president, speaking with small business owners, heard from them that the continued threat of default into that season would be very damaging to them. And we can't -- we don't think that's the right way to go.

QUESTION: You said yesterday, though, that the president would likely sign a short-term debt ceiling increase. That still stands, is that correct?

CARNEY: Yes.

Here's what we -- but let's be clear about what his position has been and what I have said. It is the very least that Congress could do to pass the legislation that would raise the debt ceiling for a short term and pass legislation that would fund the government for a short term, as the Senate has already passed.

And the president has believed that, as I think I have stated many times, that we should raise the debt ceiling for longer than that, as the Senate has proposed and will vote on soon, because we should not link the threat of default to budget negotiations.

Now, he's very eager to engage in budget negotiations. That's been something he's amply demonstrated all year long and is reflected in the budget proposal he made earlier this year. But we should not have a situation, a dynamic that has led to where we are now that led to what we saw in the summer of 2011 and that would be recreated in six weeks if we had to once again go through a process where one party was trying to extract concessions in budget negotiations in return for lifting the debt ceiling.

QUESTION: I just want to try one more time. There was a proposal that the House Republicans came to the White House with yesterday for their meeting, and then House Republicans say there was a new proposal that they presented to White House staff last night that also included reopening the government. The White House has received that proposal?

CARNEY: I'm not disputing that. But...

(CROSSTALK)

QUESTION: Can you tell me the White House's position? It sounds like you're not accepting that proposal. I just want to make sure we can clarify that.

CARNEY: What the president and the speaker agreed on in their phone conversation is that everybody should keep talking. And the president appreciates the constructive approach that we have been seeing and that is certainly a change and a welcome change. And he hopes that an agreement can be reached.

In relation to the proposal that has been discussed in the press, it is our view that we cannot have a situation where the debt ceiling is extended as part of a budget negotiation process for only six weeks, which would put us right back in the same position that we're in now.

And I think -- I know that this is not uncomplicated, but a clean debt ceiling increase for six weeks with no conditions attached to it is distinct from one that links it to a budget negotiation and the continued threat of default as a point of leverage in a budget negotiation, which is just, again, continually putting the American economy at risk in an effort to achieve some partisan advantage, which we can't do.

And, furthermore, when it comes to the various proposals that have been discussed, it's certainly our view, as it has always been, that there is no reason to keep the government shut down. The president wants to engage in constructive budget negotiations. He has seen indications from Republicans in both the Senate and the House in the last 24 hours that they, too, are interested in engaging in serious budget negotiations where we can achieve some of the goals that he put forward in his budget proposal, buying down the sequester, investing in areas of our economy that will help it grow and protect the middle class, continuing to work at reducing our deficit and addressing our long-term debt.

And he very much looks forward to that. But there's no reason to not open the government right away, in his view.

QUESTION: Jay, do you feel like you're close to an agreement?

TAPPER: We are going to take a quick break from Mr. Carney's press briefing, a three-and-a-half-hour wait almost. And he said he's not going to read out any meetings, so we're going to try to get some of the actual skinny on what's going on with Senators Sherrod Brown and Johnny Isakson, a Democrat from Ohio, Republican from Georgia.

We will be right back.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD.

We just heard the White House spokesman emerge three hours late to report nothing all that new about the struggle over the partial government shutdown or the debt ceiling. Much of the attention has been on President Obama and the House, Republicans in the House, but the Senate will have to pass any potential deal, too, and senators are intricately, intimately involved.

I want to bring back in Senator Johnny Isakson, Republican from Georgia. And we are also now joined by Senator Sherrod Brown, Democrat from Ohio.

And this is such a moving target. You met with the White House, the president at the White House yesterday, you this morning. What did President Obama have to say about where this ultimately is going to end up?

ISAKSON: Well, first of all, we have gone from not talking to each other at all a week ago to where everybody's talking. The meeting this morning was substantive and helpful.

The president laid out some what-if possibilities. We laid out some what-if possibilities. But at least the beginning of the process of getting to a deal has begun. We're a long way from being there, but at least we have begun the process.

TAPPER: Is it still important to you, Senator Brown, that the first part of any deal is lift the debt ceiling and open the government?

SEN. SHERROD BROWN (D), OHIO: Yes, I have spent much of this week -- and I know Johnny does the same kind of thing in Georgia -- calling bankers, calling people running big research institutes in Ohio, research facilities, calling hospital administrators, businesspeople, just to see what's happening.

And this shutdown is already making a difference. He represents the Centers for Disease Control. I represent Battelle and Wright-Pat Air Force Base, and a NASA facility.

And more than anything, when the government shuts down for two weeks or three weeks or four weeks, these very highly skilled engineers and research scientists and mathematicians and physicians, you furlough them, 97 percent of NASA employees are furloughed.

TAPPER: It's crazy.

BROWN: Over time, if this happens now and it happens again with the next debt ceiling or the next continuing resolution, we start losing some of the best talent we have. And we know what CDC and NIH and Case Western and NASA, we know what it produces in terms of wealth and prosperity and human knowledge. And we just can't afford as a nation to operate this way.

TAPPER: Senator Isakson, why can't the government just be open now? It's a short term deal anyway. So, it would be in tandem with a short term debt ceiling raise, and obviously, with Republicans in the House having carried out the threat and the government shut down, President Obama and the Senate Democrats know that they're serious.

Why not just open the government, lift the debt ceiling, it's short term anyway, and then the negotiations can really begin?

SEN. JOHNNY ISAKSON (R), GEORGIA: I think that's the point we're at. I think those who thought shutdown was a good idea have now learned it's not a very good idea. In fact, it's a dumb idea. We need to open the government for all the reasons Sherrod was just discussing.

A very short-term debt ceiling increase is not a real good idea because you're just pushing off the debate we're having now to right before Thanksgiving.

I think what we should do is get the government back to work, set a fundamental framework where we could have negotiations on long term entitlement reform that will bring about savings in terms of debt increases, and an increase in the debt ceiling over a period of time, long enough to stabilize the markets.

And I think that possibility is there. There will have to be some trade-offs but we're at the table. Those are the things we're talking about.

TAPPER: And, Senator Brown, one of the things I heard House Republicans say is possible in terms of trying to get a deal going for a bigger budget deal that includes safety net or entitlement programs, that includes tax reform, is removing the smaller sequester spending restraints and letting spending go up which would please Democrats who want the higher levels, but then requiring some of these cuts down the road.

Is that something you might be willing to consider?

BROWN: It's something we should consider. I mean, we should consider everything now. I think, though, we never want to send a message that if you want -- if you want to repeal a law, whether it's Obamacare or something else, you don't get more at the bargaining table by threatening to shut the government down or threatening to default, because we know the damage -- just this week. Johnny and I sit on the Finance Committee together. Secretary Lew was in the committee yesterday, I guess.

We know already that leading up to this debt ceiling, this October 17th, whether it's exactly a real date or not, it's close enough, we know that the treasury bonds have gone up, interest rates have gone up 30 to 50 basis points, a third to a half of a percent. That's just -- that's too damaging potentially for the economy.

I was talking to a major bank in my state yesterday, and they said if we would have a deal now, that third or half percent might go back down to where it was, but it may not do that that quickly. That could mean higher interest rates on student loans. It could mean businesses that are borrowing in the capital markets would pay a little more. None of that is good news. So, we can't -- we can't set a precedent that this is the way to do business in the future.

TAPPER: Senator Isakson, you said that you think people who were in favor of a shutdown have learned that it's a dumb idea.

ISAKSON: A lot of them.

TAPPER: A lot of them. I was going to say, certainly not all of them. I heard Senator Ted Cruz, your colleague, at the Value Voter Summit this morning, he -- I don't think he sounded like he was -- thought this was a dumb idea. A lot of Republicans in the House still think that this is the plan.

What do you make of these piecemeal spending bills that have been offered to the Senate, Republicans in the House say, hey, we've been trying to open up the NIH in your state, we have been trying, you know, to feed dependent children who need formula through WIC, but the Senate Democrats won't take it up. Does that wash with you?

ISAKSON: Well, I think them offering those ideas was a good thing for them to do but it was also a confession they all of a sudden understand shutting down the government was not a very good idea when you talk about NIH, CDC, not paying our military, the burial proceeds for our fallen soldiers. Those were -- those were terrible consequences of the shutdown. I think the House members started realizing those consequences become real. You lose your leverage, if you had any to begin with.

TAPPER: What are you hearing from your governor, John Kasich, who I remember as being a fairly conservative Republican in the House? Although that was a different era of conservativism in the House, I suppose.

BROWN: Yes. Some good news in Ohio is that it looks like in spite of the legislature, that we're going to see Medicaid expansion. There's discussion about an announcement today. It's not final but it looks good in that direction. It's $3 million in the state. It means hundreds of thousands of people are going to get health insurance that wouldn't have otherwise. TAPPER: So, he's joined the RINO caucus, as it were?

BROWN: Perhaps. I mean, it's not my party. I don't have --

TAPPER: Right.

BROWN: Johnny has -- Johnny has to answer for them.

(CROSSTALK)

TAPPER: -- calling him a RINO.

Do you think, last question for you, Senator, is a big deal going to be done or is this going to end with a small deal and hopes for a big deal?

ISAKSON: Somewhere in between. I think we're going to get a deal done. I think we're going to get the government back open. I think we're going to get the debt ceiling lifted for a period of time, which I hope is certainly longer than six weeks and goes into next year, so we can sit down and do some tough negotiating on debt, deficit and structural reform of Medicare and Medicaid.

There may be a couple other technical things we do but it's time to sit down at the table and lead like the biggest and best nation on the face of this Earth should be leading.

TAPPER: I wonder if people watching and seeing a Democratic senator and a Republican senator, a liberal and a conservative, sitting down being civil with each other --

BROWN: Don't forget, this continuing resolution we passed in the Senate had $70 billion in cuts already. So, this was --

TAPPER: Right. Right. Because the Senate Democrats had already gone along with the House Republican cuts. Boehner couldn't deliver.

BROWN: Yes.

TAPPER: Senator Sherrod Brown, Democrat of Ohio, Senator Johnny Isakson, Republican of Georgia, thank you so much. We appreciate your coming in.

Coming up, let them eat cod. How the government shutdown could cost U.S. king crab season. One of the captains from the hit show "Deadliest Catch" makes a plea to Washington, D.C. and he will join us next.

Plus, the divide in the Republican Party. The rift that's keeping our government closed front and center at the Values Voter Summit. Did the real leader of the party stand up today? Was he or she even there? The panel will debate that when we come back.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD. Now, it's time for the money lead. There's a real ripple effect going on with this partial government shutdown and it's not just into the lives of the more than 400,000 government employees still on furlough, because even if Congress finds a way to reopen the government by early next week, that may already be too late for people like Keith Colburn, the crab fishing boat captain made famous on the Discovery Channel's "The Deadliest Catch."

(BEGIN VIDEO CLIP)

KEITH COLBURN, FISHING BOAT CAPTAIN: I like being out on the water chasing something, you know? It's like we're looking for that pot of gold. Not pot of gold, just pot of crab.

(END VIDEO CLIP)

TAPPER: Here's the rub for the captain -- crabbing season is just days away. And a shuttered government could mean no fishing license for him and his crew and his competitors. Today, he was on Capitol Hill telling lawmakers to get it together now.

(BEGIN VIDEO C LIP)

COLBURN: On behalf of all fishermen, I'm asking Congress to end the shutdown now. I'm a small businessman in a big ocean with big bills. I need to go fishing.

(END VIDEO CLIP)

TAPPER: And Captain Keith Colburn joins me now.

Captain, thanks so much for being here. We appreciate it.

So, the season is supposed to start Tuesday.

COLBURN: Yes. The (INAUDIBLE) crab fishery starts October 15th.

TAPPER: But even if the shutdown were to end today, which it will not --

COLBURN: We're basically locked down. Our fisheries are all closed because we don't have National Marine Fisheries, I guess they're deemed unessential staff. They're kind of essential to us. They aren't on the job to issue our permits.

So, we're basically -- right now, we're looking at probably a three to four day delay, that's if they open their doors today. Everything I'm getting now that I'm back in D.C. is there's no real effort being made, or push being made to get the government back on track.

TAPPER: And how narrow is crab season?

COLBURN: Well, crab season is time-specific because we are, basically, especially our red king crab, about half of that goes to Japan and the other half comes to the domestic market. And a good percentage of that goes to the holiday market. So New Year's in particular.

So if we don't have our crab delivered frozen and shipped by about the first or second week of November, then it's not going to make the holiday markets and we're not going to see the premium price we would normally see this time of year.

TAPPER: So, we're really talking just a few weeks here.

COLBURN: Yes, not only a few weeks. I mean, we're talking a few days. I mean, if the government doesn't get their act together by the middle of next week, then they're going to definitely seriously impact our price at the dock. And that's going to spiral down to coastal communities, little guys, processors. It's not just 80 fishing boats in the Bering Sea.

TAPPER: How many people will this affect, do you think?

COLBURN: Well, near term, it's affecting the 80 boats with six, seven guys on each boat. It's affecting eight or ten processors that have hundreds of processors standing by waiting to take our catch, you know.

TAPPER: Then the residual effect of all the people --

COLBURN: And the residual effect.

The thing is, it's like the tip of the iceberg as well because there's other essential personnel in other offices around the United States in the fisheries that for, let's say, for example, the observer coverage. You know, it's a federal program. A lot of fisheries around the United States have observers.

Right now, fishermen that are operating with observers on board are fine. But as their finish date or day sailing gets met and they have to be replaced. Well, right now, they can't issue crews numbers to put in new observers into the system. So, pretty soon, guys are going to start getting to the dock and being told, sorry, we can't give you a new observer so you can't fish.

TAPPER: The bottom line is this industry depends on a working, thriving government bureaucracy, I don't mean that term in a pejorative way, but government workers. And they can't do their jobs because of the shutdown.

COLBURN: Exactly.

TAPPER: And if you guys aren't out there doing this, is someone else or other fishermen from other countries going to go and fill the void?

COLBURN: Well, you know, we're fishing in U.S. waters so other countries. So, we can't -- other countries won't come in and actually take our crab. But there is a threat that our crab will be replaced by cheap Russian imports or pirated Russian crab, and that will definitely occur in Japan. Right now, there's already a hint that the Japanese buyers are a little bit jumpy about being able to get the Alaskan crab so they're turning to alternatives. The alternative is to buy Russian crab.

So in effect, the government shutdown's putting Americans out of work and putting Russians to work. How's that figure?